Epicenter The Business of Tech Major Label Messes With the Wrong Guy

[The Straight Story]

....

But when he compared IODA’s payouts to Warner Bros.’ payouts over the same five-year period, he was shocked to discover the reverse to be true.

quirkHis band earned about $12,000 from the independent albums distributed digitally through IODA, but only $62.47 from Warner Bros., so $395,214.71 of the band’s advance remains unrecouped (meaning that it owes that amount against future royalties earned).

Quirk doesn’t think his band will ever recoup that sizable advance, but it’s the principle of the thing. By refusing to update their accounting technology for dealing with revenue from digital streams and downloads — data that digital music services such as Rhapsody and iTunes already deliver to the label anyway — he claims major labels are letting all sorts of digital revenue slip through the cracks and into their coffers, not to mention absorbing large upfront royalty advances from music start-ups.

“We all know that major labels are supposed to be venal masters of hiding money from artists, but they’re also supposed to be good at it, right?” asks Quirk in his post.

The whole saga makes for a fascinating (if somewhat lengthy) read.

http://www.wired.com/epicenter/2009/12/major-label-messes-with-wrong-guy/

[MineralMan]

1. I learned from doing a couple of books that the advance is

pretty much it, when it comes to income from a book. You can forget ever seeing additional royalties, so you negotiate the largest advance you can. I imagine the same is true with recorded music. Creative accounting eliminates any additional money coming to you.